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Overview of Hess Midstream LP
Hess Midstream LP (NYSE: HESM) is a Houston, Texas-based midstream energy company that plays a critical role in the oil and gas supply chain. Established in 2014, the company specializes in owning, operating, developing, and acquiring midstream assets that support the transportation, processing, and storage of hydrocarbons. Its operations are structured into three key segments: gathering, processing and storage, and terminaling and exporting. Hess Midstream LP provides fee-based services to its parent company, Hess Corporation, as well as third-party energy producers, ensuring stable and predictable revenue streams.
Core Business Segments
- Gathering: The gathering segment is the company's largest revenue driver. It includes natural gas gathering and compression, crude oil gathering, and produced water gathering and disposal. These services are essential for transporting raw hydrocarbons from production sites to processing facilities efficiently and safely.
- Processing and Storage: This segment focuses on processing natural gas and fractionating natural gas liquids (NGLs). The company also provides storage solutions for crude oil and NGLs, ensuring energy producers have the infrastructure needed to manage supply and demand fluctuations effectively.
- Terminaling and Exporting: Hess Midstream facilitates the terminaling, loading, and exporting of crude oil and NGLs. This includes railcar transportation and propane storage and terminaling, enabling efficient delivery to downstream markets.
Business Model and Revenue Generation
Hess Midstream LP operates under a fee-based business model, which insulates it from commodity price volatility. By charging fixed fees for its services, the company ensures steady cash flows, making it an attractive option for energy producers seeking reliable midstream solutions. Its strategic partnership with Hess Corporation provides a stable customer base, while its ability to serve third-party clients enhances diversification and growth opportunities.
Market Position and Competitive Landscape
Operating within the midstream sector of the oil and gas industry, Hess Midstream LP competes with other infrastructure providers. However, its integrated asset base, which includes gathering systems, processing plants, and terminaling facilities, positions it as a comprehensive solution for energy logistics. The company's relationship with Hess Corporation further strengthens its market position by ensuring a consistent flow of hydrocarbons through its infrastructure.
Strategic Significance
Hess Midstream LP plays a vital role in the energy value chain by providing the infrastructure necessary for the efficient movement of hydrocarbons from production to market. Its operations support the reliability and efficiency of energy producers, contributing to the overall stability of the energy supply chain. With a focus on operational excellence and customer service, the company is well-regarded for its expertise in midstream operations.
Conclusion
In summary, Hess Midstream LP is a key player in the midstream energy sector, offering a diversified portfolio of services that enable the efficient transportation, processing, and storage of hydrocarbons. Its fee-based business model, integrated asset base, and strategic partnership with Hess Corporation make it a cornerstone of the energy supply chain. By focusing on operational reliability and customer satisfaction, Hess Midstream LP continues to provide critical infrastructure solutions to energy producers across the United States.
Hess Midstream Operations LP announced the pricing of $750 million in 4.250% senior unsecured notes due 2030. The offering is aimed at financing the repurchase of approximately 31 million Class B units from Hess Corporation and Global Infrastructure Partners. The private notes offering, restricted to qualified institutional buyers, is set to close on August 5, 2021, pending customary closing conditions. Importantly, the notes are not registered under the Securities Act, and thus cannot be offered or sold without proper registration or exemption.
Hess Midstream Operations LP, a subsidiary of Hess Midstream LP (NYSE: HESM), plans to offer $750 million in senior unsecured notes due 2030. The net proceeds will finance the repurchase of approximately 31 million Class B units from Hess Corporation and Global Infrastructure Partners. These Notes will be sold to qualified institutional buyers under Rule 144A and to non-U.S. Persons per Regulation S. The offering will not be registered under the Securities Act, and is not an offer to sell or a solicitation in any jurisdiction where such an offer would be unlawful.
Hess Midstream reported a strong second quarter 2021, with net income rising to $162 million from $107.8 million a year prior. Net income attributable to Hess Midstream was $11 million, or $0.44 per Class A share. Adjusted EBITDA reached $230.2 million and Distributable Cash Flow was $207.5 million. The company expects to see continued growth, driven by increased gas capture and a planned rig addition in September. A quarterly distribution of $0.5042 per share was declared, marking an 11% increase from the previous quarter.
Hess Midstream (HESM) announced an 11% increase in its quarterly distribution per Class A share, effective Q2 2021, reflecting a 10% immediate increase along with a targeted 5% annual growth. The Board also approved a $750 million unit repurchase program aimed at enhancing shareholder value and optimizing capital structure. This repurchase targets 31 million Class B units, expected to be accretive to distributable cash flow. The quarterly distribution of $0.5042 per Class A share will be payable on August 13, 2021, reinforcing financial flexibility and ongoing cash flow.
Hess Midstream LP (NYSE:HESM) announced a conference call on July 28, 2021, at 12:00 p.m. ET to discuss its second-quarter 2021 earnings. U.S. callers can dial 866-395-9624, while international participants should dial 213-660-0871, using passcode 7419849. The call will also be available via a webcast. A replay will be accessible from July 28 until August 12, 2021. Hess Midstream operates diverse midstream assets, primarily in North Dakota's Bakken and Three Forks Shale, providing essential services to Hess and other customers.
Hess Midstream LP (NYSE:HESM) announced that executives, including John Gatling, will meet with investors on June 22-23, 2021, at the J.P. Morgan Energy, Power and Renewables Conference. A fireside chat is scheduled for June 22 at 2:40 p.m. Eastern Time. Investors can access a presentation on the company’s website. Hess Midstream operates fee-based midstream services, focusing on oil, gas, and produced water handling primarily in the Bakken and Three Forks Shale plays in North Dakota.
Hess Midstream LP (NYSE: HESM) announced that CFO Jonathan Stein and VP of Investor Relations Jennifer Gordon will meet with investors at the EIC Investor Conference on May 19-20, 2021. An investor presentation is available in the Investors section of Hess Midstream's website.
Hess Midstream operates a range of fee-based midstream assets, primarily serving the Bakken and Three Forks Shale plays in North Dakota, focusing on oil, gas, and produced water handling.
Hess Midstream LP (NYSE: HESM) announced that CFO Jonathan Stein and VP of Investor Relations Jennifer Gordon will meet with investors at the Citi Global Energy and Utilities Conference on May 12, 2021. A presentation will be accessible in the Investors section of Hess Midstream's website. The company is a fee-based, growth-oriented midstream entity, providing services primarily within the Bakken and Three Forks Shale plays in North Dakota. For further details, visit www.hessmidstream.com.
Hess Midstream (NYSE: HESM) reported a first quarter 2021 net income of $159.6 million, up from $129.0 million in Q1 2020. After noncontrolling interests, net income attributable to Hess Midstream was $8.6 million, or $0.45 per Class A share. The company generated Adjusted EBITDA of $226.7 million with Distributable Cash Flow of $204.6 million. Revenues decreased slightly to $288.8 million compared to the prior year. Operationally, throughput volumes for crude oil terminaling and gathering fell by 23% and 22%, respectively, due to reduced drilling activity and severe weather effects.
Hess Midstream LP (NYSE: HESM) declared a quarterly cash distribution of $0.4526 per Class A share for Q1 2021. This reflects a 1.2% increase from the previous quarter, translating to a 5% annual growth. The distribution will be payable on May 13, 2021 to shareholders on record as of May 3, 2021. Hess Midstream focuses on providing fee-based services through its diverse midstream assets in the Bakken and Three Forks Shale plays in North Dakota.
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